Motivating Employees for Better Results

Motivation is an area which has increasingly stimulated the interests of managers. Although a large number of authorities have made their contributions, in the words of Vroom and Deci "the question of what motivates people to perform effectively is not an easy one to answer".

Since the optimum utilisation of human talent is a critical factor for the profitability and growth of an enterprise the co-relationship between motivation and the art of management needs to be clarified. For the enhancement of productivity and creativity there is a prime need to have a committed workforce. On the other hand if not properly managed people can even turn to be destructive and turn against an organisation.

Various propositions have been put forward to bring out the concept and definition of which one of the best known is by B. Berels and G.A. Stenier reads as follows:-

"A Motivation is an inner state that energizes, activates, or moves and that directs or channels behaviour towards goals". Some motives have been identified as arising out of natural human needs and are termed primary motives. Other motives which are learned are known as secondary motives.

In Management the provision and maintenance of an environment conducive to the optimum utilisation of human resources is a critical factor. The function of management cannot be effectively accomplished without an understanding of what motivates people.

The concept of motivation revolves on the question why people do (or refrain from doing), certain things in a certain way. What is it that causes people to conduct themselves in the way they do.

How is it that two people engaged on the same task perform differently? Of course the education, experience, skill and training, i.e., the ability level of each person will be one criteria, but still the motivation factors of each individual will also create a difference in performance.

Performance = function (ability level x motivation)

Managers who attempt to improve the performance of subordinates need to understand motivation.

Understanding Motivation

The source of Motivation has been said to originate from a situation of a need deficiency.

Motives = the driving force/s underlying human behaviour within, to achieve a goal or goals.

The stimulus for action = the desire to satisfy a needs deficiency triggers off action or behaviour.

The need drives a person into action with the motive of trying to achieve a desired goal or goals, which can be tangible or intangible. The process followed in achieving this goal would be a choice between alternative courses of actions.

Need ' Drives ' Behaviour ' Consequences

Deficiency (try to achieve (achievement of (stimulus) goal/objective) goal/desired) outcomes)

Any gap which exists between the goal that has been achieved and the actual need, will lead to further action until the tension created is fully released. Hence it has been said that unsatisfied needs will lead to motivation. The needs of each individual will vary, from one person to another.

Similarly individual needs may differ from the needs of the organisation.

"Human motives or needs are directed towards desired goals or ends and a person's behaviour is selected consciously or unconsciously towards the achievement of these ends".

The need to understand individual needs would then be a major area of concern if organisational needs are to be achieved. But the complexity of human nature is such that this identification of individual needs or motives will not be a simple task. In as much as the needs of one individual differs from the other, one motive can result in different courses of action or same action can be the result of different motives.

Our understanding of another individual's motivation is influenced by our own attitudes towards people or our own perception of people. MOTIVATION "is a set of energetic forces, originating both within and outside the INDIVIDUAL that initiate behaviour and determine its forms, direction, intensity and duration". - C.C. PINDER 1984.

It is basically concerned with willingness to work. This is the difference between "working and working willingly". LEADERS should use skills to bring about the LATTER.

What is the relevance of motivation for the successful business executive?

* It is a valuable mechanism to understand the causes of work behaviour in organisations;

* It can help the predictor effects of Managerial action;

* It can be utilised to direct behaviour to achieve organisational and individual goals.

In the past there were certain underlying assumptions followed by leaders in trying to motivate their staff for results. They were:

* All employees are alike;

* All situations are alike;

* There is one best way to motivate people

Early work on Motivation Centered around three theories:

(a) Hierarchy of needs - Abraham Maslow;

(b) Theories of X and Y - Doughlas McGregor;

(c) Motivation - Hygiene Theory - Herzberg.

In recent years motivation attempts have given special emphasis to a new approach which centered around employee expectations. Expectancy theory developed by Victor Vreen (1964) has been further expanded by Perter-Lawler. Although this approach needs further resting and reinforcement and extending. Yet it is a comprehensive, valid and useful approach to understand motivation of staff by successful business Executives of today.

This theory assumes that:

1. Behaviour is determined by a combination of forces in the individual and forces in the environment;

2. People make their own decisions about their own behaviour;

3. People have different types of needs,

4. People make decisions among alternative plans of behaviour based on their perceptions (expectations of how a given behaviour will lead to the desired outcome).

The Theory

ABILITY

Motivation ' Effort ' Performance ' Outcome

ABILITY and EFFORT must be high for GOOD PERFORMANCE. Mere effort alone won't lead to good performance without necessary ability. When performance occurs, the outcome can be intrinsic outcome or extrinsic outcome. An individual will consider the relative value of the outcome thus accounting for the level of SATISFACTION or DISSATISFACTION. This will give a feedback from actual behaviour back to motivation. Expectancy theory is a useful model which holds promise for more effective motivation of individuals and a more effective design of organisational systems.

In the last issue of the Industrial Relations Forum there had been two errors The correct version should read as follows:

Workman's Compensation

The employer is not liable to pay workman's compensation if the employer could prove that the accident has occurred due to negligence or due to influence of liquor or wilful disobedience or failure to wear safety gears by the employee concerned.

Gratuity

The employer has the right to make deductions from the gratuity in case of fraud, misappropriation of funds of the employer and the wilful damage to the property by the employee concerned.

Learn To Handle Trade Unions

The topic of the next seminar to be organised by the Federation of Chambers of Commerce & Industry of Sri Lanka is "Handling of Trade Unions at Workplace." This is to be held at the Sri Lanka Foundation Institute from 8.30 am on July 30. The resource persons would be Mr. G.Weerakoon, Former Commissioner of Labour, Mr. Gamini de Silva , HR Director, Singer (Sri Lanka) Ltd. Mr.S.Egalahewa, Attorney- at -Law and Mr.B.P.Ratnayake.

Indusytrial relationss forum

Question - In my Company I have a very slow worker. His output is far below compared to the others. However he is not idling and is working hard during working hours. Can I take disciplinary action against him for inefficiency?

Answer -Disciplinary action can be taken only on acts of misconduct. You have stated that the worker concerned is working hard during working hours. That means he is trying to perform maximum possible. You will not be able to establish inefficiency of your slow worker as misconduct before a labour tribunal, if he is dismissed. In a case decided in the Court of Appeal (Ranjit Kumar Vs. St Anthony's Hardware Stores) it was held that inefficiency is not misconduct. The remedy available to you is to go before the Termination Unit of the Labour Dept and seek approval for the termination under the Termination of Employment Act 1971 after submitting reasons acceptable to the Commissioner of Labour.

Question - I am an owner of a communication centre. My employees have to work even on Saturdays and Sundays with the payment of overtime at the rate of two times . In an another Communication Centre owned by a friend of mine , the employees are paid overtime at the rate of two and half times for working on Sundays. Please explain the correct position?

Answer - Your business is coming under the Shops & Office Employees Act, under which any employee employed on a Sunday is entitled to receive overtime at the rate of one and half times of his hourly rate and a day's lieu leave. If lieu leave is not granted he is entitled to receive an extra day's salary. This means he should be paid two and half times of his day's pay.

Question -I have recruited employees on a fixed term contract of 6 months. After the contract expires I re-employ them after two weeks time again on a fixed term contract for a further 6 months. This practice has continued for over 5 years. Am I liable to pay gratuity for these employees?

Answer - Under Payment of Gratuity Act any employee who has completed uninterrupted service of 5 years are entitled for gratuity. Uninterrupted service includes the service interrupted by cessation of work not due to any fault of the employee. Therefore your employees who have completed 5 years service with the 2 weeks break are entitled for gratuity.

Question - I am writing for clarification regarding the Employees Provident Fund.

(A) Time of Starting EPF. - Usually the employment is initially for a 6-month trial period after which, if satisfactory, the employee is confirmed in that position. Does EPF start after the trial period on confirmation? OR

Does EPF commence as soon as a person is taken on employment? There are some persons who work for a very short period (some only a week or two) and leave for another job. It does not seem practical, and is actually very frustrating, to start EPF while both the employee and the employer are not sure how long the employee will continue.

(B) Payment of EPF. - Some persons seeking employment do not wish to contribute towards EPF. They say that EPF was started for the benefit of the employee but it takes a long, long time and much trouble to get the EPF amounts due to them when they are no longer employed and making their claims.

If the employer is compelled to make EPF payments (which includes deductions from the employee) then there is every chance that the employee will not accept the employment or will ask for higher wages which the employer may not be in a position to give.

It seems that the employee should be given the option whether or not to join the EPF scheme.

I trust you will be able to help to clarify the above concerns.

Answers (A) Under the provisions of the EPF Act, the employer should make contributions towards the EPF in respect of all employees except for casual working in jobs of a casual employees nature, from the date of appointment. Of course this includes trial period or probation period.

(B) Under the EPF Act it is the responsibility of the employer to make contributions towards EPF in respect of all employees including deductions from the employee. Any agreement between the employer and employee to pay EPF benefits to the employee direct is not valid in law as it is contrary to the provisions of EPF Act. In fact the employees who receive EPF benefits direct from the employer have a legal right to claim it again from the employer after leaving his services. This means you may have to make contributions to the EPF in respect of that employee again with a surcharge which goes up to 50%.

EU ministers want end to shipyard subsidies

European Union industry ministers have agreed to end operating subsidies for shipbuilding from the end of 2000 as part of an overhual of government support for the sector.

Ministers also agreed that the commission would monitor the impact of competition from other countries, including South Korea, to see whether any specific action should be taken. The compromise deal was reached at a meeting chaired by UK trade and industry secretary Margaret Beckett.

France had called for a phasing out of operating aid after 2000 while there was pressure from other member states, mostly from northern Europe, for a faster removal of subsidies.

In the event, the agreement was supported by 11 of the bloc's 15 countries.

Mrs Beckett said: "The measures agreed are central to improving the competitiveness of shipbuilding and are beneficial to all EU countries." The agreement ends the current 9% operating subsidies on Dec. 31, 2000.

The French delegation had proposed cutting these to 8% next year, 7% in 2000 and 6% in 2001, but failed to win support from other member states.

The overhaul puts the emphasis on support in backward regions and on research and development, to bring the shipbuilding sector in line with other sectors. This will be monitored closely by the European Commission to ensure they are fair.

Sources said there was tough bargaining at the meeting on the ceiling on aid in qualifying regions.

The ministers agreed a 22.5% ceiling on aid in EU regions with GDP per head less than 75% of the average, and 12.5% for industrial regions in decline.

Mrs Beckett said: "The new regime also takes account of concerns about potential unfair pricing from major competitors, such as South Korea, as it includes arrangements for the commission to monitor any potential unfair practices and to take necessary action."

However, a number of officials said they did not currently view South Korea as a major problem as it was producing ships in less sophisticated sectors.

New rules are being introduced because the OECD agreement to phase out shipbuilding subsidies worldwide has not been ratified by the US. One official said operating aid could end earlier if the US ratified the pact.

Germany, Sweden and Portugal voted against the compromise, with the first two countries favouring an earlier end to operating aid and the Portuguese seeking further changes to regional measures. Greece abstained after asking for a concession on shortsea shipping.

Mrs Beckett said: "From a UK perspective this agreement is particularly welcome. It levels the playing field within Europe, too long tilted against our yards, and will ensure fair market conditions in this important industry." EU expenditure on operating and restructuring aid between 1990 and 1995 was Ecu 4.80 bn ($ 5.22bn) and Ecu 3.46 bn respectively, the UK delegation said.

Lloyd's List

Lanka Lubricants strong despite expected competition

Stable raw material prices and strong growth in premium brands have helped Lanka Lubricants Ltd., (LLL) strong performance in 1997. Although competition is expected to enter the market now (mid 1998), LLL's competitive advantages will enable it to meet the competition effectively.

The company's operating margins increased to 20 per cent in 1997 from 14 per cent in 1996. A combination of factors including declines in the dollar prices of raw materials, increased sales of higher margin Caltex products and reduction in interest costs.

Further with a drop in consumption forecast for the South East region, oil prices are expected to remain at current levels in the short-term.

This and the changeover to 12.5 per cent GST from 18 per cent turnover tax will keep margin at the 20 per cent+ levels in 1998, a CT Smith report on the company says.

Competition is expected to enter the market in the near future with the liberalisation of lubricants imports in the second half of 1998. However, the company's early entry, guaranteed production monopoly until at least 2000 and sole distribution rights of its products via CPC filling stations until 2004, will enable LLL to successfully hold its own.

Increased growth across all key economy sectors has contributed to volume growth. Further the continuing shift in power generation policy from hydro to thermal power and growth in ship traffic, will result in increased demand from these sectors over the next few years.

Strong cashflows have enabled LLL to drive its short-term borrowings to zero at present from Rs. 358 mn in 1996 and Rs. 50 mn in 1997. With capex for 1998 estimated at a modest Rs. 30 mn, LLL is expected to remain debt-free in the medium-term.

CT Smith's estimates stable raw material prices, continued strong sales of its up-market products and efficient management of overheads, will enable LLL to post earnings of Rs. 320 mn in 1998E and Rs. 335 mn in 1999E. Trading at PE of 5.1x and 1998E and 4.6x 1999E, the stock is extremely attractively priced, they say.

MLL plans restructuring with NDB, IFC guarantees

Mercantile Leasing Ltd. (MLL) last week announced a massive capital restructuring process, in several stages, to broadbase their core activity.

National Development Bank (NDB) and International Finance Corporation (IFC) will come on board MLL with 3 million shares each, from a two-year convertible debenture at Rs. 35 per share.

MLL has also announced a 1 for 2 rights issue of 4.2 million shares at Rs. 30 per share this September.

MLL will also issue Rs. 220 million in public quoted debentures at 14% per annum and guaranteed by both NDB and IFC. This is the first time IFC is guaranteeing a quoted debenture in the whole of the south Asian region, MLL, chairman, N. U. Jayawardena said.

The company is also creating a share ownership Trust in which 10 per cent or 2 million of the shares will be vested after the restructuring, MLL's MD, . Ranjith de Silva said at a media briefing last week.

Both NDB and IFC will become equity partners of MLL. While NDB is investing Rs. 105 million in twoyear convertible debentures, IFC will invest US$ 1.8 million in convertible loan stock.

The restructuring will result in a three-fold increase in the company's issued shares from 8.2 million to 22.9 million, Mr. de Silva said.

A capital restructuring was necessary to inject fresh capital into the specialist leasing company who together with Lanka Orix Leasing Company are the only specialised leasing companies operating here. Other leasing companies who make up about 70 per cent of the industry are supported by banks and other financial organizations and have the advantage of access to concessionary credit etc, Mr. de Silva said.

Funding has been a problem to the leasing company in the absence of a developed capital market, Mr. de Silva said. Companies are compelled to borrow from banks at high rates or resort to short term instruments like commercial paper again at higher rates.

In this unfavourable scenario the company requested IFC to support its debenture issue and also negotiated equity participation from them.

At a time when foreign investors are looking negatively at the Asian region it is commendable that we have attracted capital investment from IFC, the MLL Board said.

In an attempt to promote specialised leasing, last November's budget proposals removed a huge advantage to leasing companies, which are affiliated to banks. The proposal disallowed capital allowances (depreciation) derived from leasing being set off against non-leasing income.

While specialist leasing companies value this proposal, others are lobbying for a reversal.

Nearly 60 per cent of MLL's portfolio is vehicle leasing inclusive of cars and commercial vehicles like vans, buses, lorries etc.

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